SNEA(I)/CHQ/DIR(CFA)/2012-14/01 Dated12th March, 2015.

To

Sri. N. K. Gupta,

Director (CFA), BSNL,

New Delhi.

Sub:Serious infirmities and loopholes in the tender document relating to deployment of highly prestigious and innovative NGN must be comprehensively addressed during roll out.Critical field requirements, not tender quantity, must be the yardstick.Vendor must not be permitted to willfully inflict huge losseson BSNL. Thoroughly professional and businesslike approach towards vendor by field managers must be fully ensured.

Sir,

BSNL will be entering real competitive Telecom business era with the commissioning of eagerly awaited and highly prestigious and potential NGN project on 13th March, 2015. Launching of this critical business project will herald opening up business of BSNL to high end users and enabling them to access services that they were hitherto deprived of. This is yet another milestone in the potential business segment of BSNL after commissioning of CDR and ERP projects. Commissioning of this project undoubtedly conveys in clear and strong terms that BSNL is all set to enter potential telecom business arenato take on its competitors formidably and also reinforces confidence of the employees of BSNL to face emerging challenges successfully.

We take this great opportunity in wholeheartedly congratulating you and the entire team associated with the commissioning of NGN project for having accomplished this significant and critical business breakthrough.

Nonetheless, having said that, while NGN is to replace existing obsolete switches and thereby add huge strategic business value for our esteemed high end users by meeting their emerging market expectations, some glaring issues and infirmities,reflected in the tender procurement document, have seized our notice and we feel it absolutely necessary to bring these issues to your notice so as to address them in totality and as quickly as possible.

  1. As per the tender provisions, 30% of the sites having provision for battery and power plant, which are optional items in the tender. The vendor in the RQ quotafor Western and Northernzone, while quoting very very low rates for all theseoptional items (eg: Rs 2000 for power plant)has willfully loaded full amount in the switching equipments to claim maximum amount from BSNL as equipment cost. What is intriguing is that regardless of whether BSNL is ordering for these optional items relating to Battery and power plant, the vendor will get almost full amount and this vulnerable provision in the tender is being exploited by the vendor to inflict huge losses on BSNL. While BSNL can purchase these optional items for a few thousand rupees, it is forced to shell lakhs of rupees for purchase of each set of battery and power plant at market rate in terms of this unwarranted tender provision.

It is thus requested to direct all the concerned at BSNLCO, NCNGN wing and the respective Circles to order full quantity of Battery and power plant in the tender and utilize wherever it is required especially in the RQ quota for the west and North zones where the rates quoted are very low. If it is mandatory that the Battery and power plant is to be installed at the same site as per the tender/AMC conditions, it may be done but Circles/SSAs must be directed to shift the existing Battery and power plant from the existing site to a new location. Battery and power plantmay be invariably procured if it is less than the market rate.This will save huge BSNL money and meet the requirement of Battery and power plantwith AMC support at other important stationsalso.

Other optional items like SIP Phone (Rs 500 only) and MDF (Rs 100 only) quoted very low rate and all these items in full quantity shall be procured so that it can be utilized else where.

  1. As per the tender provision, 25% of the ports are“combo ports”(ADSL2 + plus POTS in same physical port), meantfor providing broadband connections. It is a fact that the number of BB connections vary from site to site and in some sites/SSAs/Circles, it is less than 10% of the DELs and in some other sites/SSA/Circles, it is more than 30% to 40%. If the distribution of combo ports is done judiciously, site-wise after ascertaining the exact number of BB connections working in that site, unnecessary procurement of combo ports at higher costs can be avoided. This will furtherincrease the equipped capacity as one “combo card” can provide connectionsfor 32 subscribers only where as one “POTs only card” can provide connections for 64 subscribers.

Hence the procurement of “combo cards” may be restricted to the actual requirement of each site by ascertaining the actual number of BB connections working and expected requirement in near future.This will automatically increase the equipped capacity and considerably increase the number of sites that can be replaced by NGN switches. The DSLAMs thereby becoming spare can be utilized in some other locations for the purposes of expansion also.

  1. Several Circles/SSAs are proposing replacement of life expired switches of small capacity with 50,100, 150, 200DELsby NGN switch.All these are the sites which are not having the potential to generate additional revenue by utilizing the additional features of NGN. Dumping NGN equipments at such unviable locations must be reconsidered despite Circles /SSAs insisting for this will enable them to wriggle out of AMC. Instead of replacing such unviable sites by NGN switch, the possibility of parenting these sites to some other main exchange or replacing the life expired and obsolete switch by some other replaced switch may be explored so that NGN switch can be deployed in optimal manner in areas where there is a potential for additional revenue generation.
  1. Another optional item is Computers. The vendor has quoted exorbitantly high rate of about Rs 75,000 where as the market rate is almost half of the same.These optional items may be ordered wherever they are absolutely required. At other places, the requirement can be easily met by procuring computers from the market at less than 50% of cost quoted by vendor.

In the entire process of implementation of prestigious NGN project, the interest of BSNL must be safeguarded in every possible manner and vendors should not be allowed toinflict huge losses on BSNL by dumping their equipment unnecessarily in a manner that has happened in many projects,especially at a time when BSNL is borrowing money from financial institutions to fund the project. It is a common practice in BSNL to procure equipments as per the proposals of the vendor without ascertaining the actual utility or field requirements and finally dumping these equipments in the store rooms for years together. This must be taken care of and must not be allowed to recur under any circumstances. Management would be squarely responsible for allowing vendor to dump equipment and thus inflict huge losses on BSNL which is already profusely bleeding. Management must be fully professional and businesslike in dealing with the vendor.

Your personal intervention and close monitoring is thus very important and necessary to ensure that the procurement of NGN equipments is based on field requirements and is properly deployed,keeping in view the facts mentioned above so that its implementation results in optimal revenue generation while meeting high expectations of our esteemed users.

With regards,

(K. Sebastin)

Copy to:

1. Sri. Anupam Shrivatava, CMD(BSNL) for information and kind intervention please.

2. SmtSujata Ray, ED(Fin) for information and n/a please.

3. Sri A. K. Jain, CGM(NCNGN) for information and n/a please.

4. Sri. R. C. Arya, Sr GM(NWP-CFA), BSNLCO for information and n/a please.

5. Sri. N. M. Manickam, GM (BB), BSNLCO for information and n/a please.